A New Social Contract

Some see business primarily as a force for good, while others see it primarily as a force for evil. Some see labor and the public sector as impediments to innovation while others see them as the only avenues for hope. In a bitterly divided political era like the present, these narrow perspectives not only fail to find common ground, they reinforce the lack of trust in institutions that generate anger, frustration, and even violence in our world today.

We see less inequality and more robust democratic participation in capitalist economies that have greater engagement.

One of the key issues that divides us is what to do to stop or reverse the growth in income inequality that seems to be virtually unstoppable. While we all decry it to some extent, conservatives tend to blame growing inequality on excessive government, cycles of dependency and so on, while progressives tend to blame growing inequality on capitalist greed.

There are better explanations. We can see that inequality is increasing around the world in countries with capitalist economies like ours—but we see less inequality and more robust democratic participation in capitalist economies that have greater engagement and more respectful dialogue across business, government, labor, and education sectors.

Take Denmark, for example. In the midst of rising inequality around the world, Denmark remains one of the most equal societies with a highly dynamic market economy. Workforce participation and voter participation are among the highest in the world, and the quality of life as indicated by the so-called "happiness index" is among the very highest in the world. Danes are expected to be highly productive, and they are supported to achieve that goal. A wide range of services is available to support well-being, from free childcare and free education to well-run job training and placement programs.

A few years ago one of us was invited to speak at a meeting in Denmark where four hundred people representing government, labor and the private sector had gathered for the day to find ways to make the public sector more efficient and more effective. At a time when Scott Walker was leading a bitter fight against public sector unions in Wisconsin, we sat around small tables and identified possible innovations, then presented back to the larger group. Many of the ideas involved building stronger working relationships across the silos and engaging citizens themselves as part of the solution. Late afternoon, several leaders sat on a sofa on the stage, with a coffee table and candles, reflecting about what they had learned and how they would move forward. Against the backdrop of union busting and a seriously declining middle class in the United States, the dialogue that day in Copenhagen seemed a bit surreal and incredibly mature.

Business has an especially powerful role to play in showing how to get concrete results by working together.

A key lesson we have learned in our research is that business has an especially powerful role to play in showing how to get concrete results by working together. In addition to producing high quality, innovative solutions to meet their customers' needs and desires, businesses can also support—or subtly destroy—the middle class and democracy that are at the heart of our culture, and at the heart of their own sustained success.

How can we achieve this potential, and overcome the divisive political rhetoric that obscures these mutual benefits? First we can borrow a concept from political philosophy and call on business to work with other groups in society to build a new social contract—at work, in communities, in our businesses, with workers and with government, seeing diverse stakeholders as having interests that are ultimately more intertwined than they are opposed.

Unfortunately, in recent years each of these stakeholders has retreated into its own silo, blaming each other for our economic and social ills rather than reaching out to each other in search of common ground. Some in the business community blame government for restrictive regulations, while government blames businesses for putting our economy at risk and shipping jobs oversees. Meanwhile citizens become more and more disenchanted, creating a ripe opportunity for demagogues like Donald Trump to exploit.

Only by breaking out of these silos and engaging each other in honest dialogue can we hope to build a more equitable, productive and inclusive economy. The social contract framework—the notion that different components of society make particular concessions to one another in order to realize a greater mutual benefit—has much to offer: It reminds us that we have the opportunity—and perhaps the obligation—to construct a society that works for ourselves, our fellow citizens, and the next generation.

To implement this new social contract directly in our workplaces and communities we need to coordinate work through relationships of shared goals, shared knowledge and mutual respect, supported by communication that's sufficiently frequent, timely, accurate and focused on problem-solving rather than blaming. This approach, called relational coordination, strives to unite stakeholders around a common purpose rather than seeing each individual as one of many competing and mutually exclusive interests.

This dynamic produces more efficient, more innovative, higher quality outcomes, particularly when stakeholders are highly interdependent and when they are confronting uncertainty and resource constraints. Relational coordination has been put to work in healthcare, airlines, construction, banks, schools, universities and elsewhere, where it helps diverse groups of professionals, technicians, managers, and service workers improve quality and efficiency performance while increasing innovation and their own well-being.

If we can demonstrate how engaging diverse groups can work to overcome silos in our workplaces, why can’t we extend this idea to heal the bigger divisions in society and get our economy moving in the direction we all want? These are not conservative or progressive ideas. They are just good old common sense, informed by research and practical examples that demonstrate what’s possible. The future is calling, and it's calling us. What are we waiting for?

Comments

The comments to this entry are closed.

Search

About the Blog

The SUP blog showcases new books and Press news in addition to serving as a forum for our authors—past and present—to expound on issues related to their scholarship. Views expressed by guest contributors to the blog do not necessarily represent those of Stanford University or Stanford University Press, and all guest contributions are denoted by a byline and an author bio.

Republishing Guidelines

If you would like to republish an article from the Stanford University Press blog, please contact us at blog@www.sup.org. We can secure permission to republish from our authors and provide text and other files for easy republication.

If you wish to republish an article, we ask that you credit the Stanford University Press blog as the original publisher of the material and provide a link to the source post somewhere alongside the republished content.